Yesterday, Business Insider reported that Apple is testing an MVNO service, run by Apple but operating on leased networks from Tier One CSPs like AT&T and Sprint in the US.
While this is still very early stage, the simple concept – and Apple is good at simple – is that Apple will offer their own service to go along with their phones.
According to Business Insider, beta trials are already underway in the US. There are reports that testing will begin in Europe as early as this year as well.
The business model is becoming clear. Apple’s new service will work on multiple CSP networks, and sessions will be switched between them for the best possible service. So, we are talking Apple becoming both a mobile service providers and a hubbing provider to assure roaming between Wi-Fi and cellular as well as cellular across carriers within a country and internationally. This will change the game!
Not only is this technically possible, it’s probable.
Apple, which is known for its “simplicity,” can now make it easy for subscribers to buy a phone which works the minute they turn it on, then can own and bill those subscribers – and sell them more and more services.
Apple is not the first to try this – Google’s Project Fi, which I posted on earlier this year provides service to Nexus 6 owners. That’s a very small percentage compared to the overall ownership of mobile devices, and therefore a perfect, built-in focus group! Truth is, once the business model and technology are proven, Google can move this to all Android users and we know – “Android is eating the world.”
Amazon won’t be far behind. It already sells services bundled with its tablets, for example, but the CSPs own those billing relationships – for now.
With the pervasive growth of WiFi hot spots, services like Freewheel (which I wrote about earlier this year) are growing creating even more pressure for “cellular” providers, and more opportunity for “fixed line” (in this case, cable) providers.
We’re seeing more and more mobile and fixed line providers adopt OTT services like fring, making it possible for them to bring really cool mobile user experiences to their embedded base of customers using WiFi at home, in the community, and around the world.
So, as CSPs fight a war on at least two fronts – it’s more important than ever for them to move forward and find ways to insert themselves into the “value chain” or risk losing what may be their most important asset – loyal subscribers. Would you rather buy services from Apple or from what you perceive to be a “stodgy” old phone company? In the future, will your children simply go online, order a new Android phone on Amazon Prime, and pay their monthly service bills automatically from their Amazon Prime account?
While Business Insider predicts this will be a 3-5 year play for Apple, I think we are on an on-set of an early disruption that could change everything over the next few years.